Indonesia Country Risk

Indonesia (IDN)

Indonesia's political scene continues to evolve as President-elect Prabowo Subianto prepares to take office in October 2024. Prabowo, who secured victory in the February 2024 election, has been vocal about his desire for broad political representation in his administration. He has emphasized the need for regional and tribal inclusion, stating that Eastern, Western, and Central Indonesia, as well as all tribes, must have representation in the government to maintain national unity. To accommodate this ambition, Prabowo has proposed splitting some existing ministries, increasing the number of ministries from 34 to 44. Sufmi Dasco Ahmad, chair of Prabowo's Gerindra party, confirmed that the full list of ministries will be finalised before Prabowo's inauguration on October 20. He also mentioned that Prabowo's cabinet will be unveiled on October 21, with only Prabowo and Gerindra’s secretary-general, Ahmad Muzani, currently aware of the complete list of ministers. Outgoing President Joko Widodo (Jokowi) has publicly stated that he has not been consulted on the composition of the cabinet, refuting media rumors, but indicated that he would offer his opinion if asked.

The expansion of the cabinet is seen as a strategic move to manage the diverse political demands of the grand coalition Prabowo formed to secure his presidency. However, one key coalition member, the National Democratic Party (NasDem), has decided not to propose candidates for ministerial positions. NasDem's secretary-general, Hermawi Taslim, confirmed that the party would continue to support Prabowo’s government in parliament but would not participate directly in the cabinet. NasDem leader Surya Paloh explained that the party prefers to make meaningful contributions in parliament rather than through the executive branch, a position shaped by NasDem’s prior support for Prabowo’s rival, Anies Baswedan, in the election. NasDem’s decision to stay out of the executive raises questions about the party's long-term role in the ruling coalition. Without ministerial representation, NasDem could potentially leave the coalition in the future, particularly if its interests begin to diverge from those of Prabowo’s administration.

Prabowo's close relationship with Jokowi, once his fierce political rival, also continues to shape the political landscape. Over the course of Jokowi’s second term, the two leaders reconciled, with Jokowi supporting Prabowo’s presidential bid. Notably, Jokowi’s eldest son, Gibran Rakabuming Raka, will serve as vice president in Prabowo’s administration, ensuring that Jokowi retains significant political influence even after leaving office. Prabowo’s administration is expected to face several challenges, including managing Indonesia’s political diversity and balancing the competing interests of his broad coalition. By expanding the cabinet and promising to include representatives from all regions and tribes, Prabowo aims to foster unity and reduce political fragmentation. However, the decision to split ministries and create new posts also reflects the complex task of keeping his political allies satisfied and ensuring stability.

At the same time, Prabowo will need to address key policy issues such as food security, infrastructure development, and attracting foreign investment. His government is likely to maintain Jokowi’s policies, including those focused on the downstream processing of commodities and the development of the electric vehicle (EV) sector. The transition to Prabowo’s leadership marks a critical juncture for Indonesia, with questions about how the expanded cabinet and shifting political alliances will impact governance in the years to come.